VOLUNTARY ANNOUNCEMENT TRANSACTIONS WITH CERTAIN CONNECTED PERSONS

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liabilities whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (incorporated in the People s Republic of China with limited liability) (Stock code: 598) VOLUNTARY ANNOUNCEMENT TRANSACTIONS WITH CERTAIN CONNECTED PERSONS The Group has certain business relationships (and expects to continue such relationships) in the ordinary course of business with certain joint venture partners of the Group, which are connected persons of the Company under the Listing Rules. The Company is in the process of negotiating with the relevant parties with a view to entering into agreements of the type contemplated under Rule 14A.47 and Rule 14A.35(1) of the Listing Rules in respect of the Transactions. Pending the signing of such agreements, the Company announces the nature and historical volume of such transactions and the proposed caps that would apply to such transactions if this announcement was made pursuant to Rule 14A.47 of the Listing Rules (which it is not). For clarity, the Proposed Caps are for information only and this announcement is not made pursuant to Rule 14A.47 of the Listing Rules. The Company will make further announcements when relevant agreements are signed and will comply with Chapter 14A of the Listing Rules. Sinotrans Group Company, the controlling shareholder of the Company owning approximately 57.93% interest in the Company at the date of this announcement and which is not required to abstain from voting at the general meeting of the Company as it is independent of and not an associate of the relevant connected persons identified in this announcement (except in the case of the Connected Non Wholly-Owned Companies, through its controlling shareholding in the Company), has confirmed that if a vote were required for the Transactions under Chapter 14A of the Listing Rules, it would vote in favour of any resolution that may be put to the Shareholders to approve the Transactions on the basis disclosed below up to the Proposed Caps. BACKGROUND The Group is principally engaged in the businesses of freight forwarding, express services, shipping agency services, storage and terminal services, marine transportation and trucking services. The Group has certain business relationships (and expects to continue such relationships) in the ordinary course of business with certain joint venture partners of the Group. 1

2 The Company is in the process of negotiating with the relevant parties with a view to entering into agreements of the type contemplated under Rule 14A.47 and Rule 14A.35(1) of the Listing Rules in respect of the Transactions. Pending the signing of such agreements, the Company announces the nature and historical volume of such transactions and the proposed caps that would apply to such transactions if this announcement was made pursuant to Rule 14A.47 of the Listing Rules (which it is not). For clarity, the Proposed Caps are for information only and this announcement is not made pursuant to Rule 14A.47 of the Listing Rules. The Company will make further announcements when relevant agreements are signed and will comply with Chapter 14A of the Listing Rules. TRANSACTIONS WITH CONNECTED JOINT VENTURE PARTNERS The Group has, and expects to continue, business relationships with the following Connected Joint Venture Partners, 日本通運株式會社 (Nippon Express Co., Ltd.*), 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*), 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*), Korean Airlines and 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*). Each of the above Connected Joint Venture Partners are connected persons of the Company solely by reason that each of them is a substantial shareholder of certain non-wholly owned subsidiaries of the Company, further particulars relating towhichareincludedinthenotestothetable below. Provision and receipt of transportation The Company is in the process of negotiating withaviewtoenteringintonewmasterservices agreement with each of the following Connected Joint Venture Partners, namely, (i) 日本通運株式會社 (Nippon Express Co., Ltd.*); (ii) 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*); (iii) 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*); (iv) Korean Airlines; and (v) 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*), for the provision and receipt of transportation (including freight forwarding services, shipping agency, storage and terminal services). The Company will make further announcement when such master services agreements are entered into. The Company expects that each such master services agreement (once entered) will if and when entered into by the relevant connected Joint Venture Partners will be for a term of 3 years expiring on 31 December Each such agreement will, in line with existing course of dealings with each such party require the price under such master services agreements will be determined at the market price charged by independent third parties on normal commercial terms. The Company considers that the terms of the draft master services agreements under negotiation with the relevant Connected Joint Venture Partners as described above are fair and reasonable so far as the Shareholders are concerned and in the interest of the Company and its shareholders as a whole. 2

3 The table below sets out the turnover/expenses of the Group attributable to the transactions with each of the following Connected Joint Venture Partners and its associates during 2006, 2007 and the six months ended 30 June, 2008 and the maximum cap for the value of transportation and logistic services to be provided and received by the Group respectively with each of the following Connected Joint Venture Partners and its associates for the years 2009, 2010 and 2011: Amount (RMB) Six months ended 30 June Cap 2010 Cap 2011 Cap (Note 1) (Note 1) (Note 1) 日本通運株式會社 (Nippon Express Co., Ltd.*) (Notes 2, 3 & 8) 86,490, ,580,000 36,620, ,000, ,000, ,000,000 23,130,000 35,550,000 14,490,000 87,000, ,000, ,000,000 Total 109,620, ,130,000 51,110, ,000, ,000, ,000,000 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd *) (Notes 2, 4, 8 &9) 33,240,000 34,710,000 20,480,000 80,000, ,000, ,000, ,600,000 1,245,170, ,810,000 3,460,000,000 4,490,000,000 5,840,000,000 Total 895,840,000 1,279,880, ,290,000 3,540,000,000 4,600,000,000 5,975,000,000 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*) (Notes 2, 5, 8 & 9) 37,940,000 21,300,000 7,530,000 30,000,000 40,000,000 50,000, ,410, ,930, ,230,000 1,710,000,000 2,220,000,000 2,880,000,000 Total 361,350, ,230, ,760,000 1,740,000,000 2,260,000,000 2,930,000,000 Korean Airlines (Notes 2, 6, 8&9) 20,000 20,000 10,000 40,000 60,000 90,000 13,730,000 8,470, ,450, ,000, ,000,000 1,370,000,000 Total 13,750,000 8,490, ,460, ,040, ,060,000 1,370,090,000 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd*) (Notes 2, 7, 8&9) 17,360,000 25,580,000 8,700,000 34,000,000 45,000,000 58,000, ,000, ,840, ,550, ,000, ,000, ,000,000 Total 128,360, ,420, ,250, ,000, ,000, ,000,000 3

4 Notes: 1. These are maximum cap in respect of each specified type of transaction of the Group during the relevant financial years which the Company proposes to impose for the purposes of Chapter 14A of the Listing Rules. The actual amount of transaction may be different. Taking into account the bases for the determination of the caps as detailed below, the Company considers that the Proposed Caps set out above are fair and reasonable. 2. The relevant estimates have been determined by reference to (i) the historical value of the transactions with the Connected Joint Venture Partners and their associates for the years 2006, 2007 and the six months ended 30 June, 2008; and (ii) the plans and requirements of the Group, after allowing a buffer for the inherent volatility of business in the transportation industry and perceived increase in demand for the Group s services generally with the continued economic growth of the PRC and the implementation of the Group s strategy to expand its domestic operations and overseas network and, as customers seek the services of the more established and financially sound transportation providers such as the Group to manage perceived risks associated with the current global economic downturn. 3. 日本通運株式會社 (Nippon Express Co., Ltd.*) is a substantial shareholder of a non-wholly owned subsidiary of the Company, owning 49% interest in such subsidiary. Based on the information provided to the Company by 日本通運株式會社 (Nippon Express Co., Ltd., it is engaged in the business of provision of transportation and logistic services. 4. 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*) is a substantial shareholder of a subsidiary of the Company, owning 49% interest in such subsidiary. Based on the information provided to the Company by 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*), it is engaged in the business of provision of transportation and logistic services. 5. 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*) is a substantial shareholder of a subsidiary of the Company, owning 49% interest in such subsidiary. Based on the information provided to the Company by 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*), it is engaged in the business of provision of transportation and logistic services. 6. Korean Airlines is a substantial shareholder of a subsidiary of the Company, owning 25% interest in such subsidiary. Based on the information provided to the Company by Korean Airlines, it is engaged in the business of international air cargo transportation, aircraft and related machinery repair and aircraft rental services. 7. 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*) is a substantial shareholder of a subsidiary of the Company, owning 49% interest in such subsidiary. Based on the information provided to the Company by 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*), it is engaged in the business of provision of transportation and logistic services. 8. Payment for the provision and receipt of the above services will be made by cash in accordance with the standard terms of sale or provision of services of the provider from time to time. 9. 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*), 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*), Korean Airlines and 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*) which were previously not connected persons of the Company became connected persons of the Company as a result of forming new joint ventures with subsidiaries of the Company or the acquisition of substantial equity interest in a joint venture subsidiary of the Company from a joint venture partner of the Group and thereby becoming a substantial shareholder of such joint venture (which is a subsidiary of the Company). Before becoming connected persons of the Company, these entities and their associates have been conducting ordinary and usual course of business transactions with members of the Group. 4

5 Based on the market capitalization of the Company as at the Latest Practicable Date, the percentage ratios in respect of the Proposed Caps for transactions with each of the above Connected Joint Venture Partners and its associates set out in the above table exceed 2.5% on an annual basis, being the threshold which attracts reporting, announcement and independent shareholders approval requirements for continuing connected transactions under Chapter 14A of the Listing Rules. The Company will use its best efforts to comply with the relevant requirements of the Listing Rules. As mentioned below, Sinotrans Group Company has confirmed that if a vote were required for the Transactions under Chapter 14A of the Listing Rules, it would vote in favour of any resolution that may be put to the Shareholders to approve the Transactions on the basis disclosed above up to the Proposed Caps. Receipt of aircraft maintenance and repair services The Company is currently negotiating with a view to entering into a master services agreement with Korean Airlines for the receipt of aircraft maintenance and repair services. The Company has requested that Korean Airlines agrees under the master services agreement that services offered by Korean Airlines and its associates to members of the Group under that agreement will be on prices comparable to those offered by the similar independent third parties on normal commercial terms (in the same region). The term of such agreement is to be three years. The Company considers that the terms of the draft master services agreement under negotiationwithkoreanairlinesasdescribed above are fair and reasonable so far as the Shareholders are concerned and in the interest of the Company and its shareholders as a whole. The table below sets out the turnover/expenses of the Group attributable to the transaction with Korean Airlines and its associates during 2006, 2007 and the six months ended 30 June, 2008 and the maximum cap for the value of aircraft maintenance and repair services to be received by the Group with Korean Airlines and its associates for the years 2009, 2010 and Amount (US$) Six months ended 30 June Cap 2010 Cap 2011 Cap (Note 1) (Note 1) (Note 1) Korean Airlines (Notes 2, 3 & 4) Receipt of aircraft maintenance and repair services 15,500,000 22,250,000 23,050,000 Notes: 1. These are maximum cap of each specified type of transaction of the Group during the relevant financial years which the Company proposes to impose for the purposes of Chapter 14A of the Listing Rules. The actual amount of transaction may be different. Taking into account the bases for the determination of the caps as detailed below, the Company considers that the Proposed Caps set out above are fair and reasonable. 2. The relevant estimates have been determined by reference to the prevailing market prices of the maintenance and repairing services after arm s length negotiation with Korean Airlines and its associates. 5

6 3. Korean Airlines is a substantial shareholder of a subsidiary of the Company, owning 25% interest in such subsidiary. Based on the information provided to the Company by Korean Airlines, it is engaged in the business of international air cargo transportation, aircraft and related machinery repair and aircraft rental services. Korean Airlines which was previously not a connected person of the Company became a connected person of the Company as a result of forming joint ventures with subsidiaries of the Company and thereby becoming a substantial shareholder of such joint venture (which is a subsidiary of the Company). Before becoming a connected person of the Company, Korean Airlines and its associates have been conducting ordinary and usual course of business transactions with members of the Group. 4. Payment for the provision and receipt of the above services will be made by cash in accordance with the standard terms of sale or provision of services of the provider from time to time. Based on the market capitalization of the Company as at the Latest Practicable Date, the percentage ratios of the Proposed Caps for transactions with Korean Airlines and its associates set out in the table above exceed 2.5% on an annual basis, being the threshold which attracts reporting, announcement and independent shareholders approval requirements for continuing connected transactions under Chapter 14A of the Listing Rules. The Company will use its best efforts to comply with the relevant requirements of the Listing Rules. As mentioned below, Sinotrans Group Company has confirmed that if a vote were required for the Transactions under Chapter 14A of the Listing Rules, it would vote in favour of any resolution that may be put to the Shareholders to approve the Transactions on the basis disclosed above up to the Proposed Caps. REASONS AND BENEFITS FOR THE CONTINUING CONNECTED TRANSACTIONS The Group is principally engaged in the provision of freight forwarding services, logistics, transportation and supply chain management services and solutions, including freight forwarding, express services, shipping agency, storage and terminal services, trucking and marine transportation services. Certain Transactions have been taking place since the Company became listed on the Stock Exchange in the year 2003 and in many of the cases described above, before the relevant Connected Joint Venture Partners became a connected person of the Company. The continuation of these Transactions is essential for the continued operation and growth of the business of the Group. Some of the transportation and logistic services required by the Group will enable the Group to provide end-to-end transportation to customers covering locations in which the Group does not have operations. In addition, the Group is also able to provide services to the Connected Joint Venture Partners who are not in the same line of business or who do not operate in the areas in which the Group has its core operations. Accordingly, the Directors consider that the Transactions are in the interest of and are beneficial to the Group. Sinotrans Group Company, the controlling shareholder of the Company owning approximately 57.93% interest in the Company at the date of this announcement and which is not required to abstain from voting at the general meeting of the Company as it is independent of and not an associate of the relevant connected persons identified in this announcement (except in the case of the Connected Non Wholly-Owned Companies, through its controlling shareholding in the Company), has confirmed that if a vote were required for the Transactions under Chapter 14A of the Listing Rules, it would vote in favour of any resolution that may be put to the Shareholders to approve the Transactions on the aforesaid basis up to the Proposed Caps. 6

7 DEFINITIONS The following defined terms are used in this announcement: associates Board Company Connected Joint Venture Partner(s) Director(s) Group has the meaning ascribed thereto in the Listing Rules the board of Directors Sinotrans Limited, a company incorporated in the People s Republic of China with limited liability, the shares of which are listed on the Stock Exchange 日本通運株式會社 (Nippon Express Co., Ltd.*), 馬士基集團香港有限公司 (Maersk Group Hongkong Co. Ltd*), 韓進海運有限公司 (Hanjin Shipping Co. Ltd.*), Korean Airlines and 以星綜合航運有限公司 (Zim Integrated Shipping Services Ltd.*), each being a joint venture partner of the Group or an associate of a joint venture partner of the Group and a connected person of the Company the director(s) of the Company the Company and its subsidiaries Korean Airlines 大韓航空有限公司 (Korean Airlines Co., Ltd.*), a substantial shareholder of an indirect non-wholly owned subsidiary of the Company Latest Practicable Date Listing Rules percentage ratio(s) PRC Proposed Cap(s) RMB Shareholder(s) Sinotrans Group Sinotrans Group Company Stock Exchange 24 February 2009, being the latest practicable date for the purpose of ascertaining certain information for inclusion in this announcement the Rules Governing the Listing of Securities on the Stock Exchange has the meaning ascribed thereto in Chapter 14 of the Listing Rules the People s Republic of China the maximum value of the Transactions for each of the three years ending 31 December 2011 as set out in this announcement Renminbi, the lawful currency of the PRC holder(s) of shares of the Company Sinotrans Group Company and its subsidiaries, excluding the Group China National Foreign Trade Transportation (Group) Corporation ( 中國對外貿易運輸集團總公司 ), the controlling shareholder of the Company owning approximately 57.93% interest in the Company as at the date of this announcement The Stock Exchange of Hong Kong Limited 7

8 Transactions US$ the transactions between the Group and the Connected Joint Venture Partners entered into on normal commercial terms as described in this announcement United States dollars, the lawful currency of the United States of America By order of the Board Sinotrans Limited Gao Wei Company Secretary Beijing, 24 February 2009 As at the date of this announcement, the executive Directors of the Company are Zhao Huxiang, Zhang Jianwei, Tao Suyun, Li Jianzhang; and non-executive Directors of the Company are Yang Yuntao, Liu Jinghua, Jerry Hsu, Peter Landsiedel; and independent non-executive Directors of the Company are Sun Shuyi, Lu Zhengfei, Miao Yuexin. * For identification purposes only 8